Stocks try for advance despite Best Buy warning
EmptyNEW YORK -- Wall Street tried for a modest rise Tuesday as investors grappled with a lackluster profit report from Best Buy Co. and a confirmation that new home construction fell in May.
Electronics chain Best Buy warned of an uncertain consumer spending environment and said it was lowering its fiscal 2008 profit forecast. The comments stirred concerns about flagging consumer spending.
Although investors were expecting a decline in home construction, they appeared concerned about the Commerce Department report showing construction of new homes and apartments dropped by 2.1% last month. The drop followed small gains in April and March and marked the steepest drop since January, when construction plunged 13.9%. In one possible good sign, permit applications rose 3% in May after falling 7.1% the previous month.
Analysts appeared unconcerned by the stock market's small moves, noting that some backing and filling was to be expected after the market's big advance last week, when relief over inflation and interest rates sent stocks soaring and gave the Dow Jones industrials their biggest three-day point gain since November 2004.
"We're taking a very normal time-out to refresh. One of the best ways to gauge a market is to see how it reacts when you have profit-taking. It shows that the mettle of the market is still quite positive, that there is still money on the sideline that wants in," said Al Goldman, chief market strategist at A.G. Edwards.
In midday trading, the Dow rose 20.57, or 0.15%, to 13,633.55.
Broader stock indicators edged higher. The Standard & Poor's 500 index rose 1.36, or 0.09%, to 1,532.41, and the Nasdaq composite index rose 0.15, or 0.01%, to 2,626.45.